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    LESLIE WALKER
    Leslie Walker

    Online Cat Fight Heating Up

    By Leslie Walker
    Washington Post Staff Writer
    Thursday, January 7, 1998; Page E1

    To find one of the last big unclaimed frontiers of online commerce, look no further than the most spoiled members of many U.S. households.

    No, not children, but pets, those pampered creatures who romp through 59 percent of American homes, prompting their owners to fork over more than $20 billion a year for food and supplies. If only 15 percent of pet-related sales shift online, that's $3 billion up for grabs.

    Entrepreneurs everywhere are chomping at the bit. You'd think PetSmart and Petco Animal Supplies Inc., the top dogs of real-world pet retailing, would be leading the charge. After all, the superstores have nearly wiped out small pet stores and are still grabbing sales from supermarkets.

    But online, these hunters are looking like easy prey. I went to the Web sites of PetSmart and Petco and found that neither has much to offer Fido. By now, that's what Internet watchers expect to see -- traditional retailers lagging behind Internet start-ups. It's happening in almost every area of online commerce.

    While its superstores carry more than 10,000 items and encourage people to bring their pets to roam the aisles, Petco's six-week-old Web site is a corporate brochure that doesn't sell anything or allow pet owners to communicate with anyone. PetSmart's site isn't much more lively. You'd think a company with more than $2 billion in annual sales and more than 8,000 employees could do better than a "Fun" quiz asking: "Where is PetSmart's corporate headquarters located?" Not in cyberspace, I guess.

    Contrast that with Pets.com Inc. and AcmePet.com, two tiny Web-only companies that with single-minded focus are trying to create the online equivalent of pet superstores.

    Each is building a marketplace, but that's not the only draw for pet owners. Both post daily photos of pets provided by visitors, provide libraries of pet information and experts such as lawyers and vets answering people's questions and operate lively bulletin boards where pet lovers exchange thousands of messages every day.

    "Where can you find out quickly how to treat a goat's cold?" a woman named Amy asked in AcmePet.com's exotic animal bulletin board this week.

    "Hi Amy, I have pygmy goats too," a user named Mary replied. "Don't be too quick to give penicillin for just a cold or cough."

    It turns out that a Washington-area entrepreneur is one of the leaders in this emerging field. Bruce Kirschenbaum, owner of Herndon-based AcmePet.com, said his new job is more fun than his previous ones in politics and business. "This site is owned by the people who use it. They believe in it. And that's exactly the type of audience you want."

    Kirschenbaum is in the early stages of mining his predominantly female "community" for money, which he believes will come -- in time -- from advertising and commissions on product sales.

    AcmePet.com started three years ago as a nonprofit showcase for the Web programming talents of two young men in Ohio. They liked animals and created a site for other people who shared that interest.

    In September 1997, as part of the wave of commercialism that has swept the Net, Kirschenbaum bought the site and began selling ads. "I saw pet supplies were a $23 billion industry in the U.S., and I thought, `My God, all I need is 1 percent or 1/10th of 1 percent, and it's a market.' "

    Greg McLenore, 30, was having similar thoughts in California. He had scuttled plans to attend graduate school in order to create the electronic retailer Toys.com, which he sold last spring to No. 1 rival, eToys.com Inc. The deal left McLenore with cash and stock in the Net's top toy seller, helping him finance the launch of Pets.com eight weeks ago.

    "We obviously aim to be the category killer," McLenore said. "It is our mission to have the dominant pet portal on the Internet, focusing on content, community and commerce."

    While Pets.com offers 10,000 items for sale, AcmePet.com is still gearing up for direct commerce. Pets.com also inked a deal to be the favored pet site on America Online, a tie-in that should boost traffic. Pets.com offers such Web specials as a searchable database of hotels that accept pets. Users add comments about the hotels, much like Amazon.com users write book reviews.

    Pets.com appears to be the most ambitious and interactive pet site, but the cat fights of cyberspace have only just begun.

    Don't expect PetSmart and Petco's Web sites to stay static for long. Sure enough, spokesmen for both chains say they will launch big e-commerce sites this year.

    "It may not be next week or next month, but yes, that is the vision" -- to be the Amazon of pet sales, said Tony Leonardi, president of PetSmart's direct-sales division. PetSmart eventually aims to offer more than 60,000 items online and already has valuable order-processing and delivery systems in place through its acquisitions of several catalogue companies.

    But I wouldn't bank on the either chain dominating online sales. For one thing, creating a successful Web commerce venture takes a lot more than money. It requires extensive Web design experience and a genuine appreciation for why people use the medium.

    Drs. Foster & Smith Inc., a pet-supply cataloguer, learned the hard way. Its Internet team lost six months working with a site developer with whom they eventually parted ways, then took another eight months to design the commerce site they finally launched in October. "And I'm still not happy with our site," Joseph Voellinger, the firm's Internet manager, said.

    Though the site has no way for users to communicate with one another, a few months of experience have convinced Voellinger that Web users want such tools. That, however, is a feature that doesn't seem to be on the radar screen of the folks I talked to at the chain stores.

    Smart cyber-retailers spend time monitoring bulletin boards, which can be online focus groups. Asked what they want online, AcmePet.com users readily pour out tales of friends made and animals helped. One said AcmePet helped her buy a few products, but added: "I'm not here for the shopping tips. I'm here for the community. It is a wonderful resource, and I only hope I can help a few others as I have been so generously helped."

    That's the message real-world retailers will have to hear before they can succeed online. And as electronic pet stores go claw to claw, I wouldn't be surprised to see pet owners end up as some of the most pampered customers in cyberspace.

    Leslie Walker's e-mail address is walkerl@washpost.com.

    © Copyright 1999 The Washington Post Company

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